How to recognize and avoid PayPal scams?

By ivan.diskin | February 4, 2020 |

greater than 14 minutes

PayPal is easily one of the most popular and widely used payment platforms. It caters to almost all categories of buyers and sellers on the web. If you intend to start an online business or want to make purchases on the internet, then PayPal will come in quite handy.

Having said all that, we have to admit that PayPal is hardly the safest online money transfer service. Yes, frauds and scams are still rampant on the platform. To be fair, all money-handling applications or devices are ridden with such issues. However, given PayPal’s popularity and status, scammers and attackers still work hard to find loopholes and navigate through the defenses put in place to protect users.

If you use PayPal on any level, then there is a good chance you will be targeted, or you might have had some experience with scammers and fraudsters on the platform. In this guide, we intend to furnish you with all the information you need to learn how to detect and avoid PayPal scams. You surely do not want to lose your hard-earned money to online con artists, so let’s go.

What are common PayPal scams?

Scammers and fraudsters are crafty, but since their intentions are never genuine, there are always going to be tidbits that give them away. By being proactive and learning what to do and what not to do, you can easily avoid falling into scam traps. In recent times, these are the most common forms of scams on PayPal:

  1. Creation of a PayPal account on behalf of the seller
  2. Shipping service scams
  3. Email scams
  4. Overpayment claim scams
  5. Fake charities and investment opportunities
  6. Employment scams

We will now expand on the listed scam forms in detail.

  1. Creation of a PayPal account on behalf of the seller:

As strange as it might seem or sound, one of the most common PayPal scams occurs when an individual (usually a seller) is yet to open a PayPal account. Another individual (let’s say a supposedly good Samaritan) then comes along and offers to help the seller open a PayPal account.

If you sell stuff online (and the description above applies to you), then the deal might appear reasonable. The scammers even typically attach a link to a PayPal sign-up page to prove to you that they are serious about helping you get things done. You too might click on the link and end up on a page with a PayPal registry form, but it is all a ruse.

That page is unlikely to be the real thing from PayPal. The form is not legit. It has been created to perpetuate a type of phishing attack where you (as a victim) input your personal details – such as your name, home address, billing or financial data information, and so on – and then the attackers get to harvest (or retrieve) your data. Of course, nothing good can result from such an event.

If you ever hit the register button on a phishing site after you typed your details into the boxes there, then scammers will get all the data you provided. This scam, to be fair, is not among the cleverest PayPal scams, but it still works so fraudsters will continue to have a go at it.

  1. Shipping scams:

Most shipping scams occur in one of the following forms: shipping service scams and shipping address scams.

In a shipping service scam, a buyer might request that you use a specific shipping service. They might also claim that they have a preferred vendor through which they can get a discount on shipping costs.

Well, here’s the catch: the buyer can (and will) contact the shipping company and get it to reroute the order to another address, and then they will file a complaint that the item did not get delivered at the original address. PayPal will then act to refund their money, which means you will end up giving out your goods for free.

In a shipping address scam, the scammer is likely to try to tempt you into making a delivery to an address that differs from the one registered on PayPal. In other words, they will make the payment through their PayPal account and then specify that the item must be delivered to a different address. Well, once you send the item to the address and the scammer gets it, they will file a claim stating that they never got the product.

Of course, you will be the one to lose financially in this scenario. PayPal advocates that deliveries should only be made to the addresses that users register with on PayPal. The service takes no responsibility for issues arising from the delivery of goods to an address that differs from the registered one. Even if you provide a confirmation receipt to prove that the item got shipped, PayPal will still refuse to help you.

  1. Email scams:

Most email scams conform to the events where you get a message that states that your account is about to be suspended or a notification that something is wrong with your account. In most scenarios, they try to trick you into clicking on a link in the email so that you end up on a page where you have to fill your data into forms. Sometimes, a fake PayPal page is used as the phishing website.

Attackers go to great lengths to forge an email perfectly, which means you might not be able to tell the difference just by looking at it. The link in the message should, in theory, direct you to a payment form. However, if (or when) you click on such a link, nothing might happen. At worst, your browser will return an error message. Sometimes – especially in invoice scams – clicking on the link in a suspicious message is enough to get you into trouble. You must watch out for fraudulent messages in your inbox.

  1. Overpayment claim scams:

If you are a PayPal vendor, then you have enough reason to be more concerned about this form of scam than others on average. In the scenarios where the scam plays out, you are likely to receive a legitimate PayPal proof-of-payment email from an unknown buyer. They will subsequently try to contact you to tell you that they overpaid and ask you to send the difference. You must not do it.

Of course, the buyer’s request might appear reasonable, but given the scams we have examined already, you should already know that nothing is as it seems. There are two possible outcomes – and yes, none of the events in them play out in your favor.

Here’s one: An attacker hijacked someone else’s PayPal account to make the payment for your goods. If and when the real account owner realizes that their account has been compromised, they will act to file a complaint with PayPal. In that case, PayPal will be obliged to reimburse the money (that you received). Basically, you will end up losing not only your goods but also the additional money you sent to the scammer.

And here’s the other: A scammer uses their own account to execute the ploy. Someone can easily order your product and send the money through PayPal. After doing this, the scammer will go on a campaign of complaints and dissatisfaction notes. The scammer, to further their own means, will invariably contact PayPal and then complain about their order. They could state that the goods are of poor quality, the products did not match the ad, the items were broken or damaged, and so on. At the end of it all, the scammer will convince PayPal well enough for them to give a refund. That event translates into you losing both your goods and the extra money you returned.

  1. Fake charities and investment opportunities:

A good number of fraudsters have mastered the art of playing with people’s emotions. They know exactly which buttons they have to push to get their victims to send money. For example, scammers often trick kind-hearted people into donating money to charities that do not exist. When a refugee crisis (due to war or famine) or a natural disaster (such as an earthquake) occurs, fake charities tend to pop up from nowhere.

Sometimes, the fraudsters that set up those bogus charities even go as far as creating fake websites to make everything look legit. Other times, they make do with sending information on the internet. One thing is common with all cases of such scams, though: they ask their victims to pay through their PayPal accounts.

What do you think happens if you send money to such a fake charity? Your money will end up in the scammer’s pocket – because there was no tragedy in the first place. You must also be mindful of scammers who use real events that actually occurred (relief for victims of natural disasters or payment for someone’s surgery, for example) to solicit for funds.

  1. Employment or opportunity scams:

Employment and opportunity scams might play out when someone asks an unsuspecting user to become their business partner or employee. The user will then be asked to trade products on an eCommerce site (eBay, for example), pay suppliers, and most importantly, update their PayPal account to their address.

In any case, if you play along in those events, you will be held liable for the transactions that the fraudster conducts. Of course, since they are scammers, they are likely to engage in nefarious activities, which means you might end up in trouble – if you ever get associated with them.

Does PayPal send emails about suspicious activities?

PayPal rarely does that. And if it does, it will never include a direct link to a page where you have to enter your PayPal credentials. If you get an email or text stating that your account has been engaged in suspicious activities, then you must never click on any link in the email. That email probably came from a scammer.

If you are worried, then you can type PayPal’s website address into the URL field on your web browser and then check your transaction history and other relevant details. If you find anything suspicious, then you must contact PayPal Support immediately.

How not to get scammed using PayPal;

How to protect your account from scams

Whenever there is money involved, scams are bound to occur. Nevertheless, you can easily avoid falling victim to scammers – if you follow the best practices to protect your account.

You can refuse to disclose your credentials to prevent unauthorized people from gaining access to your account, but even that will not be enough. These tips cover almost everything:

  1. Do not open spam emails; Do not click on links and attachments in suspicious messages:

Scammers do not exactly hack into the PayPal database to get your password data. If they ever succeed in getting your credentials, then you will have helped them somehow. Scammers, for the most part, try to obtain users’ credentials by tricking them into completing spoofed forms. Consider the example where someone offers to open a PayPal account on your behalf – where the email appears to be legitimate and the PayPal form looks good too.

You are simply better off ignoring all form filling requests you receive in your inbox (email). If you truly need a PayPal account, then you will do well to head to PayPal’s official page (on your own accord) and create an account there. Once you get your PayPal profile up and running, you can email the buyer or partner who wanted you to have a PayPal account.

  1. Do not be greedy:

If you find an offer or proposal too good to be true, then it is probably (or likely to be) a scam. You know too well that money does not grow on trees. Furthermore, you understand that people do not give away free money just because they are nice or in a good mood.

Well, if you ever get a message urging you to hurry up and claim free stuff or something similar, you should know what to do. Close it and forget about it.

  1. Decline all requests to a different address for shipping:

If a potential buyer requests that you deliver your goods to an address that differs from the one specified on the transaction form, then you have to decline the request. The buyer is more than likely to be a scammer. You are under no obligation to agree to requests made by potential buyers, anyway. Our recommendation here (that you should decline) also applies in situations where the buyer wants you to allow his own company to handle the hauling.

  1. Offer full refunds (and not more) if you suspect something:

If someone contacts you under the pretense of overpayment for your goods, then you will do well to cancel the entirety of the deal as fast as possible and refund the full amount paid. You must not ship your goods to that customer no matter what happens. In any case, if something does not feel right with you, then you have enough reason to halt a transaction. Ideally, you should report such incidences to PayPal.

  1. Monitor your PayPal account:

You must pay constant attention to your transaction history. We advise that you review everything regularly (from time to time). This way, if you find anything amiss or something that is not meant to be – ranging from unrequested withdrawals to strange orders – you get to send a report to PayPal as fast as possible.

Sometimes, your worries might turn out to be false alarms, but it is still better than having to deal with a scam when things have gotten too far. The overpayment scam (as we described) can be conducted from a PayPal account that got hacked. Therefore, if you see signs that your account has been compromised, you have to take the necessary steps to minimize the fallout and damage.

  1. Always double-check the addresses:

In situations where you receive an email – especially one that is supposed to have come from PayPal – you have to hover your cursor over the link it contains. If the link reads or corresponds to “support@paypal.com”, then the email can be trusted. If the link is from a different email address or a misspelled PayPal address (for example, “supp0rt@paypal.com” or “support@paypall.com”), then you must know the message is from a scammer. Do not reply to them or give them any attention.

  1. Keep an eye out for red flags:

Scammers are always coming up with new means of stealing information from people or robbing them of their money, but there are still certain things that give them away in every situation. For example, if you get a payment request, these things constitute red flags you must watch out for: you get asked to rush the shipment, the payment gets split between two or more PayPal accounts, the payments are partial or inconsistent, and so on.

There are other red flags we have failed to mention here, but we believe you get the drift here already. Details matter a lot, even the little ones. If you find something that does not make sense or if you experience an issue out of the norm, then some scam or fraudulent activity is involved.

  1. Learn to turn down offers:

If you already agreed on terms with a buyer, only for him to turn them down later, then you are free to terminate everything. It is fine to back out of a transaction. There are no serious implications or downsides from refusing to do something that does not feel right. It is the buyer’s fault for trying to change the terms that were agreed earlier on, anyway.

Even if the buyer goes a step further to try to convince you to get on with the deal by sweetening things – for example, they offer you a discount or additional money to persuade you to agree to whatever terms they want – you must stand strong. You know what is at stake, after all.

  1. Avoid direct contact or further communications:

Ideally, you should keep to PayPal for all transactions. Everything should be mediated on the platform. If you get a follow-up SMS, email, or message on any other application or service – especially after receiving a request or offer – then you will do well to contact PayPal support for guidance. Verification is incredibly important here.

  1. Block scammers:

If a buyer files an unreasonable dispute, then you must block them. You do not have to go with the flow. You might run into more problems in the future if you play unnecessarily nice with them. Of course, fraudsters tend to come back to try for more scams after realizing that the user (or victim) took no action.

  1. Do not share your PayPal credentials with anyone:

If you do not want to become a victim of scams or fraud on PayPal, then you must keep this rule to heart. You should not tell anybody your PayPal password. Your account belongs to you and you only. You must not share it with anybody. If you want to sleep without worries at night – especially knowing that the money in your PayPal account stays safe – then you must never share your credentials with anyone.

By anyone, we mean even your family members and close friends. For one, they might not know the important tips in this guide, which means their actions (if they use your account) could result in you getting into trouble or losing money.

  1. Always check PayPal buyer and seller protection policies; follow changes made to them:

Does PayPal cover you if you get scammed

? Many users do not know the answer to this question because they know nothing about PayPal buyer and seller protection policies. Well, PayPal guidelines and terms might be a pain to navigate through, but we can pretty much summarize everything you need to know to stay out of trouble this way:

These are the events or situations in which PayPal covers a buyer:

  • When a specific item was purchased but something else got delivered. For example, you ordered a mug but got sent a book.
  • When you paid for a new item but you received an already used or old version of the item.
  • When payment was made for two items but you received one and similar occurrences where you got less than you paid for.
  • When the item you paid for gets damaged during shipping. This only applies if you specified the shipping method or form in the order in the first place.
  • When the item delivered has missing major parts.
  • When a fake item – especially one that was listed as authentic or the real thing – is received.

These are the events or situations in which PayPal typically refuses to cover a buyer:

  • When the item purchased is a vehicle (scooters, motorbikes, and so on) or heavy-duty or industrial machinery. When the payment is pertaining to real estate.
  • When you pay for an item that goes against PayPal policies.
  • When the payment is made to family members or friends.
  • When the transaction is made in person or any other place or form (that is, not conducted on PayPal’s platform).
  • When the dispute gets filed 180 days after the purchase was made.
  • When the dispute gets filed for an authorized transaction 60 days after the transaction was actually made.
  • When the seller was clear about their goods by including a thorough description.

These are the events or situations in which PayPal covers a seller:

  • When the items got shipped to the right address (the one specified on the Transaction Details page).
  • When the item has a tangible (or known) form. PayPal’s protection policy for sellers does not apply to digital goods or services rendered that way.
  • When the documentation requested by PayPal or the buyer is supplied within the accorded timeframe (usually within ten business days).
  • When the seller’s permanent address is in the United States.
  • When the seller does enough to provide online tracking for all transactions marked as “eligible”.
  • When the seller does enough to provide Proof-of-Delivery and Proof-of-Payment.

These are the events or situations in which PayPal typically refuses to cover a seller:

  • When the goods involved are non-physical (that is, digital products and similar services).
  • When the items get picked up from a designated point.
  • When reversals, chargebacks, or claims that come to be due to the item turning out to be different from its on-page description are involved.
  • When the transactions were made over PayPal Here, PayPal Business, PayPal Direct, or Virtual Terminal.
  • When multiple cash payments are made for a single item.
  • When the claims get filed through other platforms (eBay, for example).
  • When the goods involved are illegal in the first place (that is, ammunition, drugs, and so on).
  • When First Class Mail International is used, which corresponds to the delivery address (and not the customer’s address) appearing on the receipt.

TIP:

Besides learning the best practices and taking the necessary precautions to avoid becoming a victim of a scam on PayPal, you have to take other serious measures to protect your data and money from attackers and scammers likewise. Is your computer protected?

You can install Auslogics Anti-Malware – which is a superb first-rate protective utility – to beef up your PC’s defense against all forms of threats. Even if you have an antivirus running as your main security program, an improvement in your computer’s protection setup (by installing the recommended application) won’t hurt. It will rather do you a lot of good, especially in situations or scenarios where something gets past your antivirus or your currently nonexistent line of defense.

Share it:
Do you like this post?
1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading...